Liberty Media will spin off its cable business holdings, including its 26 percent stake in Charter Communications (NASDAQ: CHTR), a minority investment in Time Warner Cable (NYSE: TWC) and a mobile subsidiary TruePosition into a new company called Liberty Broadband.
Liberty Media President-CEO Greg Maffei said the spinoff "will offer investors greater choice and transparency and is well timed with Charter's agreements with Comcast (NASDAQ: CMCSA) which will result in Charter owning or serving over 8 million video customers" as a result of a Comcast sell-off/swap of customers in its $45.2 billion acquisition of Time Warner Cable.
Financially, holders of Series A-C common stock would get a fourth of a share of the corresponding series of Liberty Broadband common stock for each share of common stock held as of the record date for the spinoff, the company said. Fractional shares would be bought with cash. Additionally, stockholders will also receive a subscription right to acquire one share of Series C Liberty Broadband common stock for every five shares of Liberty Broadband common stock they get from the spinoff, the press release continued.
John Malone's Liberty Media reported a first quarter 2014 operating profit of $155 million, $4 million more than the same period in 2013. That was a 20 percent improvement in revenue, from $1.01 billion to $1.05 billion.
Another Liberty company, Liberty Interactive, had higher revenue driven primarily by its largest business, QVC, which posted 0.6 percent higher revenues to exceed the 0.2 percent improvement of Liberty Interactive overall.
Yet another Malone-controlled Liberty company, Liberty Global, is coming under the European Union (EU) microscope as it attempts to acquire Dutch service provider Ziggo for about $6.8 billion.
The EU, citing potential problems from combining the Netherlands' two main providers of broadband, TV and fixed telephony, has set a Sept. 18 deadline to rule on the deal.
"The removal of Ziggo as an autonomous player could increase the likelihood that the remaining competitors, in particular the merged entity and KPN, would coordinate their competitive behavior and increase prices or delay investments," the EU said in a Bloomberg story.
Liberty Global's Amsterdam-based spokesman said the increased scrutiny isn't worrying the company.
"We remain confident that we can address any competition issues that may, in the end, be identified by the commission and of ultimately receiving a positive decision," Holtcamp told Bloomberg.
Liberty Global mulled Aereo investment, Nair says
Malone: Liberty Broadband tracker will support Charter Communications expansion
Liberty Global buys stake in RDK Management
Maffei: Liberty would eye options if Comcast fails to close TWC deal